These raids on C.B. Bhave, the
recently retired Sebi chairman, and his team follow a pattern and indicate a
threat to the independence of financial sector regulators. This kind of brazen
vindictiveness by a ministry concerning serving and retired regulators was rare
in the past.

K.M. Abraham, a whole-time Sebi member
wrote to the Prime Minister after the IT department inquiry about flats bought
by him, alleging that he and another whole-time member M.S. Sahoo were harassed
in the name of making inquiries.

This complaint against the way the finance
ministry attempts to throw its weight around comes in the backdrop of T Rowe
Price, the largest shareholder of UTI Mutual Funds, alleging that the ministry
was backing IAS officer Jitesh Khosla, who is the younger brother of Union
finance minister Pranab Mukherjee's advisor Omita Paul.

There were reports that the ministry was
not happy with Sebi as the market regulator led by Bhave was not budging on
several corporate issues, including the granting of equity licence to MCX-SX
and manipulation of shares of the erstwhile Reliance Petrochemicals Ltd (since
merged with Reliance Industries Ltd).

Mail Today was the first to publish a
report in the last week of March on the drastic changes in the higher echelons
of Sebi that were likely to lead to a change of perception of the regulator on
several critical issues. Between December 2010 and July 2011, there would be
four fresh faces on the board of the market regulator. The other critical
issues on which Sebi was not allowed to arrive at a decision before Bhave's
retirement include the Bimal Jalan Committee recommendations on market
infrastructure institutions (MIIs) and the makeover of the Takeover Code based
on the Achutan committee recommendations.